Swan refuses to rule out raids on super

by |

Mining tax earnings, which are supposed to pay for the increase in the superannuation guarantee, are way down, raising only $126m in the first six months. In the budget, it was forecast to make $2bn during 2012-13.

Talking to Fran Kelly on ABC, Treasurer Wayne Swan admitted that revenue was down, not only from Mining tax but also from superannuation. He refused to rule out increasing taxes on either income tax or super, but later in the day he issued a statement ruling out an increase to income tax. So what does this mean for superannuation contributors?

Shorten reassured Kelly that in terms of paying for superannuation changes, they had factored it into their budget papers and Mid-Year Economic and Fiscal Outlook (MYEFO). When asked directly if they were going to increase the superannuation tax paid by wealthy Australians, Shorten dodged the question: “Fran, we will be able to pay for this. We have a policy - we've already introduced the tax cut. We've done it from the first of July last year we've introduced that tax cut.” He then changed the topic to the Liberals’ suggested tax on the 3.6 million low-income earners.

Shadow Treasurer Joe Hockey declared the government’s budget was in “total chaos”, with no policy direction, when he spoke to reporters in Canberra yesterday.

He said the government was “creating uncertainty for businesses and consumers with its attack on various aspects on the au sec such as super and such as household income through personal income tax”.

“At the end of the day everyone’s just wondering how much extra tax the Government’s going to take from their pocket.”

AFA CEO Brad Fox said the constant changes proposed by political parties were causing consumers to lose faith and confidence in super as a way of investing for their retirement.

"when we're battling changes in rules and needing to change processes within our businesses, which is very expensive to do, and at the same time you've got the consumer questioning whether or not they can trust the system, it's like burning the candle at both ends. The wick's getting taken away far too fast."

Noting that other sectors of the superannuation industry had already voiced their opposition to any changes in the Budget, SPAA CEO Andrea Slattery used the occasion of the association’s 10th anniversary gala dinner to urge all members to voice their opposition to suggestions that tax concessions to superannuation will be pared back.

“We want our members to be talking to their trustee clients, to continually update them on what’s being discussed, so as to develop a strong, collective voice to retain superannuation as the main savings vehicle for Australians in retirement.

“Let’s not forget the SMSF sector represents nearly one million trustees. Or, put another way, nearly one million voters.”

Shorten declined a request for a thirty minute interview with Wealth Professional within the next eight weeks. Are you concerned that the Government sees your clients' super as a way to boost their revenue gap?

  • Paul Wiltshire on 15/02/2013 1:34:21 PM

    Haven't "The People" of Australia contributed enough, very many have nothing left because of Bankers and Government. Anyone who is crooked and acting only in the best interests of their own wallet should be worried when the people finally know the truth. Funny all the comments here seem to conflict with the views of 150 reps in Parliament. Maybe because they have a different Super Scheme. They forget "the people" voted them in to "represent" them and their communities, I don't believe any Party in Australia really care anymore for equality... Rich get richer poor getting poorer. First mistake was letting banks ect self regulate, what a joke. How much Profit have the banks posted since 08? Crooks.

  • Steve Varhegyi on 15/02/2013 12:45:20 PM

    Hey Greg, I think they were talking about the mining tax being used to fund the SG hike for public sector employees. Not you and I, or our employees.

  • Matthew Lock on 15/02/2013 11:34:42 AM

    "and they have the hide to accuse our industry for the lack of faith in financial planning matters"...Alistair would that be the same financial planning industry which has been involved up to its eye balls in contributing to nearly $4bil in lost client funds over the last 10 years?
    Super was always intended to help the low to middle income earners retire with some dignity...for some it has now become nothing more than and a form of middle class welfare and a tax avoidance scheme for the rich...the system should help those who need help...not help those who don't.

  • greg on 15/02/2013 11:30:20 AM

    I am still confused how the mining tax was going to pay for the increase in SGC as it is coming out of the pocket of small business. Possibly it will subsidise the reduction in tax revenue collected as small business will not be able to pass on this extra cost and therefore further reducing profits. Maybe someday Shorten will realise that reducing the tax deductible super form $50000 to $25000 would have an impact on the revunue raised from superannuation. Next they will be saying taxes need to be raised as people have not put enough away for their retirement. Typical short term revenue raise with no thought to future implications

  • Matt Brooker on 15/02/2013 11:16:43 AM

    In the term of this Government (a relative blink of an eye) we start to see policy that simplified super and promoted self funded retirement (and reduced welfare dependence) turned into a short term destructive cash grab because of disgraceful economic management. Thanks Julia and Wayne...said no-one ever!

  • Craig HAWKINS on 15/02/2013 11:12:17 AM

    Now there is a surprise . . . superannuation revenue is down, I wonder if that has anything to do with the reduction in the contribution caps ?? This Government needs a simple lesson in actions and consequence !!!

  • Long Term Cynic on 15/02/2013 11:06:38 AM

    Remember the joy from the masses when Labor took over in 2007?

    “...out from the door of the farmhouse came a long file of pigs, all walking on their hind legs...out came Napoleon himself, majestically upright, casting haughty glances from side to side, and with his dogs gambolling round him.

    He carried a whip in his trotter.

    There was a deadly silence. Amazed, terrified, huddling together, the animals watched the long line of pigs march slowly round the yard. It was as though the world had turned upside-down. Then there came a moment when the first shock had worn off and when, in spite of everything-in spite of their terror of the dogs, and of the habit, developed through long years, of never complaining, never criticising, no matter what happened-they might have uttered some word of protest. But just at that moment, as though at a signal, all the sheep burst out into a tremendous bleating of-

    "Four legs good, two legs better! Four legs good, two legs better! Four legs good, two legs better!"

    It went on for five minutes without stopping. And by the time the sheep had quieted down, the chance to utter any protest had passed, for the pigs had marched back into the farmhouse.”
    ― George Orwell, Animal Farm

  • alistair on 15/02/2013 10:49:44 AM

    What a total mess Superannuation has become since this government took office in 2007.
    Another attack by a government that does not know what it is doing with the publics money and they have the hide to accuse our industry for the lack of faith in financial planning matters. This government cannot run a canteen let alone understand that when the public's money is under their control, to thieve from those that are hard working is pure criminal regardless if you do this with a gun or a pen. Swan and his cronnies talk about attacking the superannuation of ordinary workers, confusing the system reducing confidence in the whole topic and those involved in it while boosting their entitlements as politicians at our expense. Now this is true theft and for their actions, their is a place in hell for each one of the labor ministers. Get them out !

  • Steve Varhegyi on 15/02/2013 10:32:56 AM

    Labor has to keep all it's interest groups happy, like the unions, the Greens, the loony left and those class traitor independents. Their need to be all things to all people has cost Australia dearly. We've gone from years of fiscal responsibility under a coalition government, to reckless spending, economic mismanagement and become more and more a bureaucratic nanny state buried under mounds of red tape and political correctness. Roll on September, so we can put this mess behind us.

  • peter on 15/02/2013 10:11:52 AM

    Many of us will pay for labor mismanagement.obviously politicians generous risk free pension entitlements will remain untouched.How can they act for us when they do not face same risks.

  • Pat on 17/02/2013 7:12:36 AM

    Matthew Lock: and for many, many people, super is a means with which they can reduce their reliance on the government support, they can improve their retirement lifestyle. More broadly, the $1tr + of superannuation monies has had a material impact on reducing bank funding costs through the amount of this sum that is sitting in bank deposits. It provides liquiditiy to equity markets to reduce cost of capital and help employment. Like it or not, it has assisted in the funding of major infrastructure products.

    Explain to me how the system does not help those who need it.

  • alleycat on 16/02/2013 9:08:06 AM

    Dear Matthew, you poor tortured and demented soul.
    Here are the facts of life.
    Rich people do not rely on superannuation for their wealth &/or retirement.
    Lets start at the bottom, the people you say who need it. Those under $31,920 should have received $1500 Co-contribution for a $1000 personal contribution which was organised by the Howard government, but your mates have now reduced that to $500, so how does that help those who need it.
    Those over 55 being the average middle class, used to be able to contribute up to $50,000 towards their retirement but that's been cut by 50.0%. If you didn't want people to become dependent on the government in retirement why would you make it less possible to do so.
    You are clearly a Labourstani from Labourstan who is a rusted on Labour supporter.
    Don't worry you'll be OK, the Labour government will just borrow another couple of hundred billion to pay your pension when you retire.

  • theresa on 16/02/2013 6:55:47 AM

    @steve - "years of fiscal responsibility"? - try 'years of pork barrelling'! The government prior to 2007 was statistically one of the most spendthrift in the nation's history....

    That being said - the taxpaying general public certainly needs some certainty around saving for retirement.....nothing stops them investing into superannuation quicker than not trusting that the structure that they invest into is going to be the same as that which they will ultimately be dependent upon....

  • Matthew Lock on 15/02/2013 4:18:41 PM

    Sorry Greg...when done well, I believe financial planning can be a public good and I would like to stick around and try to help fix it. I'd also like to stick around long enough to see off those who are standing in the way of the industry's evolution...you know the planners and dealers who visit these blogs and scream their conspiracy theories about why the government has done this, that and the other (in the last 5 years)...the facts are that for the last 30 years the industry had a go…some cowboys stuffed it up for the rest of us…and now the regulators have had to step in...short and sweet. That’s why the planning industry has been locked out of the SMSF market…clients don’t trust us anymore and it is going to take FoFA and measures like it to get it back.

  • Lynne C on 15/02/2013 4:10:40 PM

    Roll on September 2013 - It can't come fast enough for Australia!!!!

  • Greg F on 15/02/2013 2:40:18 PM

    $4b in 10 years? The labour party drop that in a few weeks - and people like you think they are doing a noble thing trying to shut down an entire industry due to the wrong doings of a few. Go to a different industry if it disgusts you so much.

  • Craig on 15/02/2013 2:39:28 PM

    Shorten the revenue
    Shorten the benefits
    Shorten the retirement
    Shorten the confidence
    Shorten the patience
    Shorten the odds
    Shorten the time to the Election(PLEASE)

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions